Many new gimmicks and stunts marketed at entrepreneurs now exist as ways to rise to the top of the sea of investment opportunities. While we have to admit there is an intoxicating rush from pitching your innovative venture in front of an audience, the end result usually feels more like a hangover. Investors leave with more questions than answers, and entrepreneurs are left wondering if their choice of wardrobe sealed the fate of their company. Whether it’s a trade show, mixer, or conference they’re usually marketed around the emotional value proposition of “meet real investors.”
Just in case you weren’t paying attention, any investor worth his salt is already plugged in to a complex social network from which he or she plucks prospective deals. What makes you think you’ll actually find a reputable investor or advisor at one of these events? Oh, and you think that entry fee is paying only for the catering service? These events are run by businesses looking to make money. They don’t necessarily care if you close a deal while you’re there, only if your registration check clears. And this just in, handing a spiral bound PowerPoint to an investor in an elevator is about as effective as a guy throwing himself at a female bartender in a packed club on a Friday night.
You should also know by now that the Internet is full of charlatans, scam artists, spammers and a myriad of other people with questionable morals. And because there’s not a lot known about the investor process, entrepreneurs don’t really know whom to trust when they scour the web looking for funding. They’re always suspicious of something that’s offered for free (like a new online business plan farm) and are just waiting for the hidden fee to rear its ugly head. Free usually means you need to put in a credit card and spend the rest of your life trying to cancel a recurring charge for $19.99 a month. If you’re going to invest in outsourcing your capital raising work (which is not unreasonable) try to make sure that the approach is smart, that you are going to get the feedback you need to improve over time, and try to save the fantasy of a lottery ticket for the check out counter at 7-Eleven.
And lastly, if you happen to be sitting on the couch in the early am, with your computer in your lap, watching TV and one of those “We’ll Pay Money For Your Idea” infomercials comes on, you should probably view it the same way you do a fake ad on Saturday Night Live. Of course not every “invention” firm has bad intentions, but let’s just say there are a larger number of scam companies than those actually helping the entrepreneur. So do your homework and background checks. If after submitting your materials for consideration you’re having trouble making contact with a live and knowledgeable voice, it’s probably not worth your time.